Japan’s steel major, JFE Steel, released its operational and financial results for the third quarter of the current fiscal year (Oct-Dec’21). Crude steel production was almost flat q-o-q while steel shipments saw a slight increase in Q3.
Highlights
- Crude steel production was recorded at 6.49 mnt in Oct-Dec’21, almost flat q-o-q. On a yearly comparison, the output was 3.5% higher compared to Q3 of the previous fiscal.
Consolidated crude steel output in the quarter totalled 6.85 mnt.
- Steel shipments stood at 6.85 mnt in Q3, up marginally by 1.2% q-o-q. On a yearly basis, shipments rose by 3.8% y-o-y.
- Exports ratio in Q3 stood at 45.9%.
Steel demand in Japan is expected to be in recovery trend. However, at present, demand is temporarily weakening due to the reduction in automobile production resulted from a shortage in semi-conductors and parts. Although the supply chain challenges are expected to be eased gradually, normalisation is expected from the new next fiscal year.
The outlook for domestic ordinary steel consumption is positive and expected to increase by 4.2% y-o-y and 2.8% q-o-q.
Market outlook
- Automobile sector: The annual auto production forecast has been lowered to 8 million units, down 0.2 mn units from the previous forecast. However, the production activity levels are expected to recover in Q4.
- Shipbuilding sector: Orders for new ships remain solid along with an increase in both cargo movement and chartering market amid the recovery of the global economy.
Carbon reduction measures: The company has raised 2030 carbon emissions target to minimum 30% above FY2013-14 levels from the 20% set earlier.
Forecast
The company has revised down standalone crude steel production target for the current fiscal to 26 mnt from 26.5 mnt forecast earlier.
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